I’ve seen picket signs on the side of the road. I’ve heard of all the scams, and I’m not a sucker. I would never fall for one of those scams. In fact, I’ve never wanted to not pay the IRS. I wish it were as simple as not wanting to pay. As an independent contractor, I’ve made a substantial amount of money over the years. But owing to some bad tax advice, I’m in a bind. I’ve amassed a huge debt to the IRS and I recently lost my biggest client. I don’t know how I’ll pay the tax debt. What can I do?
For what it’s worth, you should know your position isn’t unusual. Many businessmen who are fabulously successful accept bad tax advice, and by the time they realize they owe a large sum to the IRS, they are no longer making the same income that helped them dig so far into tax debt.
But don’t worry. You have options. Since you know you owe the money and want to find a way to settle up, the IRS, believe it or not, will be more than happy to work with you. The IRS comes down hard on the ones who don’t want to settle up. For those who cooperate, the IRS can be lenient.
One of your best options might be the Installment Agreement. It works like a mortgage or a car payment or any other type of debt you pay off in installments. The first thing you should do is consult a qualified tax professional. He will analyze your previous returns, determine the exact amount you owe, and negotiate with the IRS for the lowest amount of a monthly payment, allowed under law, to pay down your IRS debt without having to alter your lifestyle drastically.
Additionally, it’s possible you could qualify for the Offer in Compromise program, which could reduce your IRS debt by pennies on the dollar. The IRS has found it to be more beneficial to work with those who owe taxes instead of chasing them for decades. Ask your tax professional about this program.
More Tax Help, IRS News and Tax Relief Tips:
- If I am not eligible for the Offer in Compromise program, can I enroll an Installment Agreement?
- Since the New Year has rolled around, I’ve made myself a promise: I want to get rid of my tax debt. I owe about $140,000 in back taxes and now earn about $65,000 per year (with no savings). I don’t know where to begin. Can you help?
- For reasons that aren’t worth describing here, I’m in trouble. Whereas I once made six figures, I now make a roughly average income. Worst still, I owe a lot of money in back taxes – taxes owed for when I was making good money. In all, I owe about $127,000, according to an accountant. I don’t have that kind of money! What can I do?
- Ask the Tax Resolution Expert - Do I Qualify for the IRS Offer in Compromise Plan or Participating in the IRS Installment Agreement Payment Plan?
- Ask the Tax Resolution Expert: The IRS Offer in Compromise or Installment Agreement Programs May Be Your Tax Debt Solution
Tags: Installment Agreement, Offer in Compromise
